Home / Politics / Policy /  DIPP panel suggests third party certification for ease of doing business

New Delhi: An expert committee set up by the Department of Industrial Policy and Promotion (DIPP) has recommended credible third party certification in most areas of government regulation to further facilitate ease of doing business in the country.

Headed by former DIPP secretary Ajay Shankar, the committee whose report was released on Friday night said once government allows third party certification, multiple players could emerge within a year’s time. As a deterrent, however, the committee suggested that some percentage of such certification should be subjected to random audit with stiff penalties leading up to even withdrawal of accreditation for laxity.

The committee was set up in April 2015 to examine the possibility of replacing multiple prior permissions with pre-existing regulatory mechanism and to prepare a draft legislation.

However, the committee, did not support the idea of a new law and instead recommended that a standing expert committee on regulatory affairs of eminent persons be constituted which will undertake independent impact assessment, engage with sectoral regulators and advise the government to address specific issues with the regulators. “The committee should first of all address specific concerns raised by investors through industry associations as well as individually across the entire range of economic activities. It should also take up issues suo moto. The objective should be to go into matters in sufficient detail on specifics and generate a broad consensus for precise changes," it said.

In designated industrial parks and zones, the committee observed that standards can be clearly laid down in advance relating to the environment, building bye-laws, safety and other norms. “With such pre-determined regulatory framework an effective system of third party certification could actually lead to the doing away with multiple prior permissions altogether," it added.

For speedier environmental clearance, the committee said ministries such as coal, mines, steel and power whose projects need diversion of forest land should jointly with the environment ministry work out a 20 year perspective geographical plan indicating preferred locations in prioritized categories for their anticipated projects where green clearances could be given quickly.

The committee also recommended that the environment ministry in partnership with state governments may create land banks for compensatory afforestation and the project developer should be spared the burden from putting together land for the same purpose after paying for the cost. “The time for getting forest clearance would be considerably reduced and compensatory afforestation would also be done speedily. With this, it should be possible to do away with the present system of two stage forest clearance and just give forest clearance on obtaining full payment," the report said.

Based on pre-existing environmental regulatory framework, individual units confirming to specified plant level emission standards should be allowed to come up without having to seek environmental approval. “The units should also not need the consent to establish or consent to operate," the committee said.

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